NewsPolitical News

Actions

Supreme Court refuses to lift block on Biden student loan repayment plan

The decision keeps in place an appeals court ruling that the Biden administration cannot carry out additional forgiveness under the SAVE Plan while lawsuits make their way through the courts.
Supreme Court Biden Student Loans
Posted
and last updated

The United States Supreme Court has rejected a plea by the Biden administration to restore most of the president's multibillion-dollar student debt forgiveness plan.

In an unsigned order, the high court said Wednesday it was keeping a hold on the SAVE Plan while lawsuits make their way through the courts.

It comes after the 8th U.S. Circuit Court of Appeals last month granted a temporary injunction filed by a group of Republican attorneys general who claimed the administration did not have authority to enact the SAVE Plan.

While the case is ongoing, the ruling stipulates that the Biden administration cannot carry out additional forgiveness under the SAVE Plan.

In response, a spokesperson for the White House said, “Our Administration will continue to aggressively defend the SAVE Plan – which has helped over 8 million borrowers access lower monthly payments, including 4.5 million borrowers who have had a zero dollar payment each month. And, we won’t stop fighting against Republican elected officials’ efforts to raise costs on millions of their own constituents’ student loan payments.”

What is the SAVE Plan?

The SAVE Plan was created by an executive order in 2023 after the Biden administration failed in its efforts to forgive up to $20,000 of federal student loan debt per borrower.

The SAVE Plan gives some borrowers lower income-driven repayments, while forgiving some borrowers' loans outright.

RELATED STORY | 30 million student loan borrowers to get email about student debt forgiveness

The White House said that student loan borrowers enrolled in the SAVE Plan who have made payments for at least 10 years and originally took out up to $12,000 are eligible to have their loans automatically forgiven.

Additionally, the White House said for every $1,000 borrowed above $12,000, a borrower can receive forgiveness after an additional year of payments. That means someone enrolled in the SAVE Plan with an original debt of up to $21,000 would have their loans forgiven by the time they reach 20 years of payments.

RELATED STORY | Student loan borrowers are struggling to make repayments

When the Biden administration first enacted the SAVE Plan last year, borrowers with only undergraduate loans began repaying loans at 10% of their discretionary income. The calculation for discretionary income increased from 150% to 225% of the federal poverty level under Biden's order.

On July 1, the amount borrowers were expected to pay back was set to drop 5% of their discretionary income, meaning payments would have been even lower.